All terms
Finance & Moneybeginner

Net Profit

Definition

The money remaining after subtracting ALL costs from revenue, including COGS, overheads, marketing, taxes, and every other expense. This is your actual take-home.

Why it matters

Revenue is vanity; net profit is sanity. A £100,000 revenue business with £95,000 in costs is barely surviving. Net profit is the only number that tells the full story.

Example

Revenue: £8,000. COGS: £2,400. Marketing: £1,200. Subscriptions: £300. Accountant: £150. Net Profit = £3,950. That is what the business actually earned this month.

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